Huntington Ingalls (HII) Q1 Earnings Miss, Revenues Up Y/Y

Huntington Ingalls Industries, Inc.’s HII first-quarter 2018 earnings of $3.48 per share missed the Zacks Consensus Estimate of $4.07 by 14.5%. However, the bottom line improved 36% from $2.56 a year ago.

Total Revenues

Total revenues came in at $1.87 billion, which surpassed the Zacks Consensus Estimate of $2.01 billion by 6.2%. The top line also rose 8.7% from the year-ago $1.72 billion. The upside was driven by higher sales volume at the Newport News and the Ingalls shipbuilding divisions.

Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise

Huntington Ingalls Industries, Inc. Price, Consensus and EPS Surprise | Huntington Ingalls Industries, Inc. Quote

Segment Details

Newport News Shipbuilding: Revenues totaled $1,082 million, up 11.4% year over year backed by higher revenues in naval nuclear support services and aircraft carriers. Operating income declined 29.2% to $51 million due to one-time bonus payments in 2018, related to recently enacted federal tax reform. Also, year-to-year variances in contract mix affected the operating income.

Ingalls Shipbuilding: Revenues at this segment came in at $585 million, up 6.4% year over year on higher revenues in amphibious assault ships. Operating income dropped 3% to $64 million due to lower risk retirement on the NSC program.

Technical Solutions: Revenues at this segment were $233 million, up 3.6% year over year driven by higher revenues in oil and gas and fleet support services. Operating income was $2 million compared to an operating loss of $18 million in the year-ago quarter.

Backlog

Huntington Ingalls received new orders worth $2.6 billion in first quarter. As a result, the company’s total backlog reached $22 billion as of Mar 31, 2018.

Financial Update

Cash and cash equivalents as of Mar 31, 2018, were $528 million, down from $701 million as of Dec 31, 2017.

Long-term debt, as of Mar 31, 2018, was $1,280 million compared with the 2017-end level of $1,279 million.

Cash from operating activities, at the end of first-quarter 2018, was $120 million compared with $98 million at the end of 2017’s first quarter.

Zacks Rank

Huntington Ingalls carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Peer Releases

Spirit AeroSystems Holdings SPR reported first-quarter 2018 earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.35 by 18.5%.

L3 Technologies LLL posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%.

Embraer SA ERJ incurred a loss of 13 cents per share in first-quarter 2018, wider than the Zacks Consensus Estimate of a loss of a penny.

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